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Small Businesses Want Their Share of New Government Spending

By

Kelly Spors

Jan 22, 2009 1:38 pm ET

The inauguration balls are over. Small-business owners now want to know: How big a piece will they get out of the new spending pie?

After all, President Obama has proposed spending billions of dollars on federal projects like upgrading U.S. highways and infrastructure and building “green” power grids. The debate over whether enough small businesses are winning contracts is sure to get heated as federal projects get under way.

Some background: Congress has a goal that 23% of all prime and subprime government contract dollars go to small business. Yet, as we’ve reported, the SBA’s record of ensuring small firms get that share of federal contracts is less than remarkable. A Washington Post report a few months ago found that many corporate giants, such as Dell Inc. and Lockheed Martin Corp., managed to score contracts coded as small-business contracts.

The American Small Business League, a group focused on small-business contracting issues, is concerned that President Obama isn’t passionate enough about the issue. They feel Mr. Obama has wavered on legislation, opposed by the League, that would allow venture-capital firms to qualify for small-business contracts after they purchase a small company, essentially by changing the definition of a small business as “independently owned.” They were, then, disheartened to see Mr. Obama pick a venture capitalist as new SBA administrator.

President Obama has said little in recent weeks about where he stands on small-business contracting and the SBA’s new direction won’t be clear until after Karen Gordon Mills, the new administrator, is confirmed.

Readers, how important is the government-contract issue to you? What can the government do to make it easier for small businesses to win contracts?